Aroture Odiri: 8th National Assembly and EU de-listing of Nigeria from High-Risk Third World countries

February 2019 was supposed to be a month of love but the European Union wasn’t showing any affection to Nigeria. Since money is the number one reason for suspicion, disagreement and divorce, it came as no surprise that it was the reason the EU added Nigeria to a list of 23 states that pose money laundering and terror financing risks. The move was necessitated by the need to combat money laundering on the part of the EU. Other countries on the list include Saudi Arabia and Panama.

The warning signs were there. Back in July of 2017, the Egmont Group of Financial Intelligence Units suspended the Nigeria Financial Intelligence Unit (NFIU) for a lack of independence.
The Egmont Group is a global body of 155 financial intelligence units across the world. The Group makes sharing of financial intelligence, expertise, and capability easier across the world.

The lack of independence allegation stemmed from the NFIU being under the purview the EFCC and lacking its own legal framework, which was frowned upon by international standards. The implication of this was dire. If the credibility of Nigeria’s financial watchdogs was called into question, it would affect the inflow of funds from international sources.

Diaspora remittances ($25bn in 2018), foreign direct investment ($3.3bn in 2018), and a swath of other avenues of fund flows into Nigeria would be affected. Someone had to arrest the situation.

Cue the National Assembly. Recognizing the urgent need for action, they passed the Nigeria Financial Intelligence Agency (NFIA) Bill, which separated the Nigeria Financial Intelligence Unit (NFIU) from the EFCC and structured the organization in line with international standards, ergo providing it with its own framework. The National Assembly passed this bill by March 2018, and by July 2018 the Presidency signed it into Law. In September of 2018, the Egmont Group lifted the suspension.

The law empowers NFIU to receive currency transaction reports, suspicious transaction reports, currency declaration reports, and other information relating to money laundering and terrorist financing activities, from financial institutions and designated non-financial institutions. Additionally, the organization will receive reports on the cross-border movement of money and other monetary instruments and also maintain a well updated financial database for collection and retention of information.

Fast forward to February 2019, and again Nigeria had to address the latest move by the EU which placed it on the 23-state list of “dirty money” countries. The Ministry of Foreign Affairs and the NFIU reached out to the EU and provided assurances that based on the bill passed by the National Assembly and signed into law by the President, the country would be addressing money laundering with the utmost seriousness.

On 25th March 2019, the European Union took Nigeria off the list of high-risk countries with deficiencies in money laundering and terrorism financial control. The NFIU’s media analyst while fielding questions from journalists stated; “We are also using this medium to respond to inquiries about the current position of the EU’s recent listing of Nigeria as High-risk third country with a deficiency in money laundering and terrorism financing controls.” He continued, “The listing was officially withdrawn by the Council of Europe on 5th March 2019 while giving room for the European Commission and the European Parliament to align their positions.”

Thanks to swift action from the National Assembly, billions of dollars in remittances and foreign direct investment have been saved. A further unquantifiable amount in reputational damage was also salvaged. This latest heroic move by the legislature is a testament to where Nigeria ranks on its list of priorities and shows that over the last four years the positive impact of their decisions has been felt around the country. From the “Not too young to run” bill to the passage of the Petroleum Industry Governance bill among others, it is a record to be proud of.